MUSCAT, 20 November 2003 — Central Bank of Oman has warned that any commercial bank or a financial institution violating its regulatory regime would be taken to task unfailingly.
According to press reports on Tuesday, the CBO has put in place a matrix of penalties for those not honoring the apex bank’s laws and rules and regulations.
The CBO said it will impose penalties — ranging from 2,500 rials to 10,000 rials — on a commercial bank or a finance and leasing company if it violates or fails to comply with the 2000 Banking Law or regulations issued by the CBO board of governors.
“The new directive came into effect from November”, said CBO, adding: “The matrix of penalties is a minimum penalty structure and it should not be perceived as an additional or a new penalty, as it falls within the framework of an already existing provisions.”
The CBO pointed out that it could exercise its discretion to forfeit pecuniary gains made from the violation or noncompliance of the regulatory regime.
Also, if an institution is found guilty after failing to justify or defend its lapse, the CBO can withdraw the license of the defaulting bank or suspend its operations. The CBO can also deny access to the CBO’s credit facilities.
The new directive has come in the wake of a concerted CBO campaign to encourage banks to fine-tune their risk management system, corporate governance and transparency in keeping with the international standards to safeguard the integrity, efficiency, soundness and stability of the sultanate’s financial system.